Costa Rica's legal system is based on the Roman-Continental Law.
Practical Implications: Written law, very strict and specific formalities for contracts, agreements etc., procedures and regulations are more detailed.
There are many rules and regulations for certain transactions that are compulsory.
Conflicts among parties must always be settled or solved through Court and in some cases in Arbitration Centers.
land Titles are guaranteed by the State.
All information, transactions, encumbrances, provisional annotations are recorded and shown in the Central Public Registry.
All Real Estate contracts and agreements must be in writing, made by an Attorney/Notary Public, filed at and recorded with the Public Registry.
*In C.R. only Attorneys can be Public Notaries, and only they have authority to grant legal effects to contracts.
Ownership is not transmitted by means of transferring a title document, but instead through written contracts that must be recorded in the Public Registry by an Attorney/Notary Public.
Mortgages, Easements, Preliminary Agreements, etc. must also be recorded in the Public Registry by an Attorney/Notary Public.
Beaches, islands and land surrounded by water bodies cannot be owned, and coastal properties have very specific and strict rules.
* All these documents are compulsory to be submitted with the Public Registry.
Property is usually purchased through a LLC known in Costa Rica as a Sociedad Anónima or S.A.
An S.A. can be incorporated by any foreigner, it requires a minimum of two incorporating partners ( although it can be owned 100% by a single person after its registration), a minimum of 4 Directors, and it must have a legal address in Costa Rica
Processing time for incorporating an S.A. is on average two weeks.
Purchasing through an S.A. has many advantages.
Contracts written both in Spanish and in English are legally valid.
Watch out for compulsory formalities in contracts and procedures.
A.- Incorporate an S.A., a subsidiary or act as an individual.
B.- Rent an office, obtain Internet and telephone lines.
C.- Register with local Municipality for commercial license.
D.- Register with Tax Office.
E.- Commence operations.
Average set-up time: 4-6 weeks.